What did the Tribunal hold?

The Tribunal noted that the tax effect was below the revised monetary limit of Rs. 50,00,000/- for filing appeals before the ITAT, as per CBDT Circular No. 17/2019. The Revenue's counsel agreed with this assessment.

The Revenue filed an appeal before the ITAT against an assessment order. The tax effect on the disputed amount was Rs. 44,53,203/-. The assessee argued that the appeal should be dismissed as it fell below the monetary limit set by CBDT circulars.

What were the issues?

Whether the appeal filed by the Revenue is maintainable before the ITAT given the tax effect is below the prescribed monetary limit for filing appeals.

ACIT vs Vijaya N Thakkar | ITAT Mumbai 2019

Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI

Before: SHRI C.N. PRASAD & SHRI N.K. PRADHAN

For Appellant: Mr. Ankit Daga, AR

For Respondent: DR Assessee by : Mr. Ankit Daga, AR

Hearing: 18/09/2019Pronounced: 25/10/2019

ORDER

PER N.K. PRADHAN, AM

The captioned appeal filed by the Revenue is directed against the order of the Commissioner of Income Tax (Appeals)-44, Mumbai (in short ‘CIT(A)’) and arise out of the assessment order passed u/s 143(3) of the Income Tax Act 1961, (the ‘Act’).

Central Board of Direct Taxes (CBDT) vide Circular No. 17/2019 2. dated 08.08.2019 has amended Circular No. 3/2018 dated 11.07.2018 for further enhancement of monetary limit for filing of appeals by the Department before the ITAT, High Courts and SLPs/Appeals before Supreme Court as measures for reducing litigation.

ITA 3908/MUM/2018/A.Y.2013-14 Vijay N. Thakkar 2 3. CBDT vide Circular No. 3/2018 dated 11.07.2018 has specified that appeals shall not be filed before the Income Tax Appellate Tribunal (ITAT) in cases where the tax effect does not exceed the monetary limit of Rs.20,00,000/-. For this purchase, ‘tax effect’ means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of issues against which appeal is intended to be filed. Further, ‘tax effect’ shall be taxes including applicable surcharge and cess. However, the tax will not include any interest thereon, except where chargeability of interest itself is in dispute. In case the chargeability of interest is the issue under dispute, the amount of interest shall be the tax effect. In cases where returned loss is reduced or assessed as income, the tax effect would include notional tax on disputed additions. In case of penalty order, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against.

At para 13 of the above Circular, it has been mentioned that:

“13. This Circular will apply to SLPs/appeals/cross objection/references to be filed henceforth in SC/HCs/Tribunal and it shall also apply retrospectively to pending SLPs/appeals/cross objections/references. Pending appeals below the specified tax limits in para 3 above may be withdrawn/not pressed.”

As a step towards further management of litigation, CBDT vide 4. Circular No. 17/2019 has fixed the monetary limit for filing of appeals before ITAT at Rs.50,00,000/-.

ITA 3908/MUM/2018/A.Y.2013-14 Vijay N. Thakkar 3 5. In the instant appeal filed by the Department, the tax effect on the amount in dispute is Rs.44,53,203/-. Therefore, the Ld. counsel for the assessee submits that the appeal filed by the Department be dismissed.

Before us, the Ld. DR fairly agrees that the tax effect herein is below the monetary limit of Rs.50,00,000/- fixed by the above Circular for filing of appeals before the ITAT.

In view of the CBDT Circular No. 17/2019, this appeal involving tax effect of less than Rs.50,00,000/- is dismissed as withdrawn.

ACIT-32(3), MUMBAI vs. VIJAYA N THAKKAR, MUMBAI

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